Same military benefits go to activated reserves, families DESERT STORM/ The home front PERSIAN GULF SHOWDOWN

Reservists who are called up to active duty are entitled to the same benefits under the Soldiers' and Sailors' Relief Act of 1940 as regular service men and women.

This week, both categories of soldiers got additional tax benefits when President Bush signed an executive order designating areas in the Persian Gulf region as combat zones.

Under the order, all pay received by enlisted personnel and the first $500 of officers' pay on active duty in Desert Shield is tax exempt; and all personnel in the combat zones do not have to file their income tax returns for 180 days after they depart the gulf region.

In general, the families of activated reservists on duty for more than 30 days are entitled to "almost every single benefit that a military family has," according to Sydney Hickey, associate director for government relations for the National Military Family Association.

But, Hickey cautions, that can mean financial hardship in some cases.

For example, a provision in the relief act protects an active reservist's dependents from being evicted from their home provided their rent does not exceed $150 a month.

"And there aren't many places in Baltimore where people are living for that," Hickey says.

This provision prompted Rep. G.V. "Sonny" Montgomery, D-Miss., chairman of the House Veterans Affairs Committee, to submit a bill last week that would increase the amount of rent covered under the provision.

Another provision of the law places a 6 percent cap on the annual interest that can be charged servicemen for loans. The purpose of the cap is to ensure that active-duty personnel will be able to make their loan payments.

That provision automatically applies to reservists who are called up and whose civilian salaries may be much more than their government pay. So if a reservist has a loan at 18 percent interest, it drops to 6 percent after he is called up.

The 6 percent rate currently applies to mortgages, credit cards, car loans and personal loans. And "if a service member feels that his active duty makes it impossible to have him pay at all, he can go to court," Hickey says. "If the judge agrees, the payment can be elongated, or they can defer payments until the service member is off active duty."

However, a lending institution that feels active duty does not affect a service member's ability to pay the regular interest rate can take that reservist to court as well. "So far," Hickey says, "I've not heard anything like that."

Though credit-card companies are required by law to offer the lower interest rate, they are not required to continue to allow the use of their cards.

Carol Dunsworth, vice president of public affairs for First National Bank of Maryland, says the bank is offering customers called up for active duty two choices. With interest frozen at 6 percent, they can continue to make monthly payments, or elect to make no payments while on active duty, with interest accruing.

"But it's evaluated on a case-by-case basis," she says. "If the family has extenuating circumstances . . . we would accommodate those circumstances, if possible."

The law also provides certain re-employment rights for activated reservists. Employers must reinstate a service member upon return in a job comparable with the one held before, and with the same rights and seniority.

"But I'm afraid that's going to raise some false expectations in this time of recession," Hickey says. "If you were a machinist for a company, and that company lays off all of its machinists, you are not guaranteed a job -- just your place in the re-hiring line."

And in order to activate that right, service members must re-apply for their jobs, usually within 30 days of returning from active duty.

The act also allows activated reservists to postpone legal obligations.

Medical benefits, insurance and bonuses are military benefits, and are not covered under the act. And switching from a company's medical benefits to those covered by the military may cause problems for some families.

Active-duty dependents and those of activated reservists are entitled to free medical care at a military hospital or clinic, "if they can get into it. And right now, that's a really big 'if,' " Hickey says.

Many doctors and nurses are now on active duty in the Persian Gulf, she says, and military personnel are entitled to care before dependents.

An alternative for these families is CHAMPUS -- the Civilian Health and Medical Program of the Uniformed Services. Dependents pay a deductible, plus a co-payment of 20 percent. For outpatient visits, CHAMPUS allots a certain amount for a doctor's services, and families are liable for anything their doctor charges above that amount.